China's top leaders and policymakers are considering allowing the yuan to weaken in 2025 as they brace for higher U.S. trade tariffs as Donald Trump returns to the White House.

In a paper published by leading thinktank China Finance 40 Forum last week, analysts suggested China should temporarily switch from anchoring the yuan to the U.S dollar to linking it instead to a basket of non-dollar currencies, particularly the euro, to ensure the exchange rate is flexible during a period of trade tensions.

The contemplated move reflects China's recognition that it needs bigger economic stimulus to combat Trump's threats of punitive trade measures, people with knowledge of the matter said